Search This Blog

Wednesday, December 03, 2014

Six arguments Cameron can make to help reconcile Warsaw to his proposals for reforming EU free movement

Polish Europe Minister Rafał Trzaskowski's comments on Monday's Newsnight, where he said David Cameron’s plans to stop EU migrants from claiming benefits for the first four years after they arrive in Britain would be a "red line" for Warsaw, were widely cited in the UK media, much like Polish Ambassador Witold Sobkow's response to our initial report which heavily influenced Cameron's immigration speech.

As expected all along, Poland will be the biggest single obstacle to the changes.

Some of the reluctance is understandable. Following Poland's accession into the EU after having spent too long on the wrong side of Europe's historic dividing lines, Poles understandably do not want to accept anything that smacks of 'second class' status within the EU. While many Poles may privately think the proposals are reasonable, they also expect their government to stand up for the interests of Poles abroad, and any Polish government will find this hard to sell domestically, including a Law and Justice-led one (the issue has already lead to interesting discussions within the ECR group).

So how should Cameron deal with this? Here are six arguments he can make:

1. These reforms are the best way to let free movement stand: Cameron defended the principle of free movement in his speech and he did not pledge to impose an 'emergency brake' or quotas despite substantial domestic pressure, as to his credit Trzaskowski recognised. This reform package will allow the UK to stay signed up to free movement rules - a key Polish objective.

2. The UK cannot become a contribution-based system overnight: We hear this argument a lot out of Warsaw: "If the UK is concerned that its welfare model is too open, it can re-design it to bring it into line with those on the continent - tomorrow if it so wished. It can be done unilaterally and has nothing to do with the EU."

There are several problems with this position. Re-organising the UK's entire welfare system would be an absolutely massive undertaking - politically, economically and administratively. It would basically involve re-writing the UK's entire postwar settlement. This may or may not be desirable, but it simply won't happen any time soon, especially as a result of EU pressure. For one, the UK public won't have it.

Cameron could even bat the ball back in Warsaw's court by arguing that "It would be super-easy for you to adopt more ambitious emissions reductions. You just need to replace your dependence on coal with renewable energy, and you're in line with the rest of the EU. It can be done unilaterally and has nothing to do with the EU."

3. The UK shouldn't have to choose between keeping its welfare model and staying in the EU: The logical extension of the argument above is that only a French or Germany style insurance system is compatible with EU membership. Clearly, giving the EU an effective veto over such a sensitive area is not politically sustainable - in addition to being awfully discriminatory against the UK. Changing the rules around in-work benefits on the other hand is a pragmatic way to in effect bring the UK into line with continental systems without challenging the country's entire political order.

4. Poles and other EU migrants in the UK could be worse off under such a system: Ironically, if the UK were to adopt acontinental model andscrap in-work benefits and tax credits for low-wage earners entirely, it would hit EU migrants in the UK much harder than the introduction of a temporary qualification period as it would permanently reduce their income. Is this really a more desirable outcome from the perspective of the Polish government and other opponents of Cameron's proposals?

5. Workers on low wages do not contribute significantly to the welfare pot: While the vast majority of EU migrants come to the UK to work and make a positive contribution to the UK economy, as our research showed, workers on low-wages pay very little in income tax and national contributions due to the UK's generous tax free allowance (£10,000 per year and rising) and national insurance contributions threshold (£153 per week). This means that far from funding their own benefits, these workers, especially if they have dependent children, can actually be a net burden on the public purse. Furthermore, despite their misleading name, tax credits in the UK are a cash benefit funded via general public spending and are not correlated to individuals' tax payments.

6. The principle enjoys widespread public support across the EU: The basic principle of establishing a link between contributions and right to access benefits enjoys wide-spread support in other EU member states as the YouGov polling below demonstrates:

Finally, tone is also vital. Cameron made a big mistake by singling out Poles earlier this year leading to the deterioration in relations as revealed in the leaked Wprost tapes, a mistake which he avoided making again in his immigration speech last week. The rules will apply to everyone from the rest of the EU and not one particular group or country.

In principle I'm always happy that we should look at how they do things in other countries to see if there are any useful new ideas we could pick up.

However in practice when those who set out to exert control over our society start talking about how much better they do something in another country it's usually with some ulterior motive, very often their own personal gain; and whatever the scheme that they urge should be imported into our country from abroad it may be in their own narrow, selfish, and basically unpatriotic, interests, but not in the interests of the British people as a whole.

Many Poles privately think that UK is trying to pick and choose the rules it applies. And that Poland should follow Hungarian example and tax the hell out of companies -like Tesco- that earn a lot of money here, while managing to pay little or no taxes. Perfectly legal with EU rules, as long as the taxes have no clear national addressee :).

[Funnily enough, I yet have to read a Briton complaining that British companies are free to invest freely wherever they want in the EU - despite the fact that free movement of capital was adopted along with the free movement of people, and was not part of "The EU We Entered". This part you have no problem with. Pick and choose all the way.]

a) why UK taxpayers should now be forced to subsidise Poland, when there are private investors who are willing to put their money into Poland to help build up its economy after the ravages of communism, which UK taxpayers had previously paid to oppose and help defeat; and

b) why they should now be forced to accept the immigration of unlimited numbers of Poles into their country, on top of the transfer of jobs to Poland; and

c) why their government has committed the UK to defend Poland even to the point of a nuclear war which would utterly destroy the UK; and

d) why those leading the Tory party in the UK ever deluded themselves - if they did - and tried to delude others - which they certainly did - that it would be good to get Poland into the EU because the Poles would be their invaluable "natural allies" within the EU decision making bodies; and

e) when the Poles will ever stop whining about the raw deal they get within the EU, and in the UK, and instead seek to preserve the sentimental capital that some of their grandfathers had built up in the UK during the Second World War; and

f) how in a supposedly democratic country all of this has been brought about at the behest of treacherous politicians without its citizens ever being asked whether it was what they wanted.

"The free movement of capital is not only the youngest of all Treaty freedoms, but — because of its unique third-country dimension — also the broadest. Initially, the Treaties did not prescribe full liberalisation of capital movements; Member States only had to remove restrictions to the extent necessary for the functioning of the common market. However, economic and political circumstances globally and in Europe changed, and thus the European Council confirmed the progressive realisation of the Economic and Monetary Union (EMU) in 1988. This included more coordination of national economic and monetary policies. Consequently, stage one of EMU introduced complete freedom for capital transactions, introduced first through a Council directive and later on enshrined in the Maastricht Treaty. Since then, the Treaty prohibits any restriction on capital movements and payments, both between Member States and between Member States and third countries."

In reply:a) no worries, Polish migrants are actually net payers and it is them who subsidize the UK system. [and I would not mention communism if I were British, since it is amongst other Churchill that gave us -and the rest of Eastern Europe - us to Stalin in Jalta,]

b) because that is part of the pakage UK accepted along the way (every Treaty has to be agreed unanimously). This comes with your possibility to move, invest and sell all over EU. Yet, of course, you want to pick and choose.

c) no worries, if there is actual need, you will once again do nothing or close to nothing, just like in 1939. Let me tell you that Poles have no illusions about British military "guarantees".

d) British politics - no comment

e) A reminder: that is your government that decided to single out Poles. We merely decided not to pretend it's raining when somebody started to spit in our face. [And let me tell you that British treatment of Polish pilots in WWII generated a lot of bad will for UK in Poland.]

f) Again, British politics. I hope you may be asked what you want in your precious referendum and decide to leave. ASAP.

To TLC: I am not surprised that he does not see the 'persons' in the Treaty or cosniders capital more free than people, that is so typical British. Selective thinking all the way, pick and choose, and defend the banksters :).

"the elimination, as between Member States, of customs duties and of quantitative restrictions on the import and export of goods, and of all other measures having equivalent effect"

which in conjunction with 3(c):

"the abolition, as between Member States, of obstacles to freedom of movement for persons, services and capital"

enshrined the "four freedoms" as fundamental principles, and all four were in fact there in the EEC we joined. They have not all been elaborated at the same pace since 1957, but they were all there from the start.

a) I don't know who has told you that Polish immigrants subsidise the UK system, but if you believe that you are deluded.

b) Yes, I'm sure there are loads of Britons who want to move to Poland.

c) It was a mistake for Britain to give Poland that guarantee when it should have been clear that Britain would have enough trouble saving itself without also saving some country on the other side of Europe, and it has been another mistake to admit Poland to NATO.

d) It is British politics, and you should not comment, but I don't suppose that always stops you.

e) I'm sick of hearing about the small number of Polish pilots who fought with the allies in the Second World War, as if every present day Pole has somehow inherited rights from them which supersede the inherited rights of the British people to possess and control their own country.

f) I too hope that we will leave ASAP, and leave behind all the crap we've had to endure for the past forty years. It can't come soon enough for me, I assure you.